Octopus Energy will begin supplying electricity to homes in Japan after striking a deal with Tokyo Gas that values the company at more than $2billion (£1.5billion).
The agreement will see Octopus – one of the biggest challenger providers in the UK – enter the Japanese market as part of a 30:70 joint venture with Tokyo Gas.
Under the deal, Tokyo Gas, the largest utility company in Japan, will also buy a 9.7 per cent stake in Octopus for $200million (£150million).
Far reaching tentacles: Octopus Energy will begin supplying electricity to homes in Japan
Octopus Energy is now one of the biggest challenger providers in the UK, holding 5.7 per cent of the domestic market following its acquisition of Co-op Energy in August 2019 and ENGIE in January 2020.
The launch in Japan, where it plans to provide 100 per cent renewable electricity, will see it expand further abroad after recent moves in Germany, New Zealand, US and Australia.
The deal follows the recent sale of a 20 per cent stake to Australian firm Origin Energy that already valued the UK company at more than £1billion. Origin is set to take another stake in Octopus for $50million (£37million).
Chief executive Greg Jackson said the latest deal will see it ‘turbocharge’ their mission to ‘revolutionise energy globally’.
He added: ‘When Origin invested less than 8 months ago, we said it was fuel for stage two of our mission.
Big in Japan: Octopus plans to provide 100 per cent renewable electricity to Japanese homes
‘Since then, Octopus Energy has accelerated that mission to make the global green revolution faster and cheaper by launching Octopus Energy Germany and New Zealand, acquiring Octopus Energy USA and acquiring Upside Energy to deepen our smart grid capabilities with their powerful technology.’
Today’s valuation puts Octopus at $2.06billion (£1.5billion). It means the five-year old energy company now has a valuation not far behind that of British Gas owner Centrica.
With 1.8million customers in the UK, Octopus aims to reach 100million customers around the world by 2027, Jackson said.
A significant part of the company’s value is in its Kraken software, which the firm not only uses itself, but also licenses to Origin Energy, nPower and E.On, among others.
The software will also be used for the joint venture in Japan.
Tokyo Gas president Takashi Uchida said: ‘Through this partnership, we will contribute to the achievement of a better lifestyle for customers by realising value creation and delivery tailored to every one of them.’